Saturday, April 18, 2009

Tax Revenue Implosion

From the California State Controller:
Actual General Fund revenue in March was down $178 million, or -5.2 percent, from estimates in the recently adopted 17-month State Budget, which contained actual revenues through February 2009. Sales tax receipts were down $218 million, or -11.8 percent and corporate taxes were up by $43.4 million, or 2.6 percent. Personal income tax totals surpassed estimates by $404 million, or 32.6 percent.

The State started the fiscal year with a $1.45 billion cash deficit, which grew to $22.3 billion on March 31, 2009. That deficit is being covered by a combination of Revenue Anticipation Notes (RANs) and internal borrowing from special funds.

Those are monster holes in the budget. Sadly, those "projections" include the assumption that on May 19th voters will approve 6 special tax increases.

From Capitol Weekly:
Polls show that five of the measures placed on the ballot by the Legislature and backed by Gov. Schwarzenegger face an uphill climb next month. Schwarzenegger’s political team has attempted to lump all of the measures together as one comprehensive budget package.

In the next month we'll have Chrysler, GM, and California. No doubt some surprise guests as well.


Anonymous said...

What are California's options if the ballot measures don't pass? Begging the federal government for a handout? Ignoring the law and passing a tax hike anyway?

w said...

Can the legislature over ride Prop 13 with a 2/3 vote or is it only the population in a vote that can over ride it?

By the way, from what I can tell the cash economy is getting bigger as people lose their legitimate income streams. The self-employed and recently laid off are fighting for survival. They have to be making it difficult for businesses with legitimate payroll right now.

w said...

How is it that a cap and trade system involving permits for businesses will generate $646 billion dollars for the federal government?

If these morons were simply cutting emmissions it would be a lot easier to take them seriously. The fact that they are trying to balance the federal budget with what is in effect an energy tax makes me doubt their motivations.

serinitis said...

California could not get a 2/3rds vote on puppies are cute. Let alone on a tax increase.

They can ignore the state constitution. It takes a couple of years to wind it through the courts. Once all appeals are exhausted, the tax increase will get undone and a different illegal tax will get put in place.

Depending on the ruling on Prop 8, they can undo Prop 13 with a majority vote (debatable whether they could muster 50.1%)

tj and the bear said...

It took a 2/3's vote to pass the last budget. Stupid Reps had the Dems by the nuts and, when push came to shove, chose to hand their nuts over instead. Now they're pushing the "spending cap" initiatives to save face, whereas it's only reinforcing their hypocrisy.

The Dems had threatened skirting Prop. 13 by renaming taxes as "fees". Sure, challening that could take years, but there's nothing that says an injunction could'nt be filed and enforced immediately pending the decision.

Everyone in Sacramento -- and I mean everyone -- has proven themselves to not give a damn about the taxpayer. That'll come back to bite them... hard.

tj and the bear said...
This comment has been removed by the author.
tj and the bear said...

corporate taxes were up by $43.4 million
That's gotta be a temporary blip.

w said...

@tj, perhaps that is a reflection of lower payrolls?

@rob, we are all ugly Americans now.

Rob Dawg said...

You liked that? I had fun. It was a little like the final scene in "A FFew Good Men" when Tom Cruise gets Jack Nicholson to lose it and reveal his true nature.

w said...

I did like it. It seems some Europeans are pretty sure they carry no blame for any problems in the world. As you say, the marines in Guantanamo are doing the dirty work so that people can sleep safely 1000 miles away.